JAKS seeks to raise up to RM74.4 mil from private placement for loan repayment, working capital

• JAKS said it has entered into a call option agreement with Kenanga Investment Bank Bhd for up to 209.03 million placement shares to facilitate the exercise, but has the discretion and flexibility to procure other third-party investors to participate in the placement.

KUALA LUMPUR (Dec 20): JAKS Resources Bhd has proposed to undertake a private placement of up to 292.2 million new shares in the group, which represents 10% of its existing shares, at an issue price to be determined and announced later pending approvals.

In a filing with Bursa Malaysia on Tuesday (Dec 20), the group said it aims to raise up to RM74.4 million based on an illustrated issue price of 25.4 sen per placement share, of which RM43 million will be used to repay credit facilities and lower its net gearing ratio to 0.21 times, from 0.28 times as at end September.

Meanwhile, RM30.7 million will be used as working capital, while the remainder will be used to cover expenses related to the private placement.

JAKS said it has entered into a call option agreement with Kenanga Investment Bank Bhd for up to 209.03 million placement shares to facilitate the exercise, but has the discretion and flexibility to procure other third-party investors to participate in the placement.

"We take this opportunity to strengthen our financial position and to be in a better position to secure more projects particularly in the renewable energy space. This comes at a time of rising interest rates, recession risks and global uncertainties ahead," said JAKS chief executive officer Andy Ang Lam Poah.

"The repayment of borrowings will help reduce the interest expenses by approximately RM2.8 million per year. With a stronger financial position and capital base, the company will be better poised for growth going ahead," he added.

JAKS' share price closed half a sen or 1.82% higher at 28 sen on Tuesday, for a market capitalisation of RM595.74 million.